Government Advisers Claim Reducing Winter Fuel Payments Will Lead to Cost Savings
The committee expressed disappointment that the government did not provide an impact assessment to determine the effect on pensioners in poverty.
The Social Security Advisory Committee (SSAC) raised concerns about the cost-saving effectiveness of limiting access to Winter Fuel Payments, given the increase in applications for Pension Credit.
In a letter to the Department for Work and Pensions (DWP) published on Thursday, the SSAC highlighted that the savings from reduced eligibility for Winter Fuel Payments are offset by the rise in Pension Credit claims and the additional resources needed to process them.
The SSAC also noted that the government’s efforts to increase Pension Credit uptake could lead to more successful claims than anticipated, based on recent data indicating a significant increase in weekly Pension Credit claims since the proposed changes to Winter Fuel Payments were announced.
Concerns were raised about the DWP’s capacity to process the escalating number of Pension Credit claims despite hiring additional staff, as training would be required before processing cases, which could take up to two months.
The committee emphasized the need for timely processing of Pension Credit claims to ensure eligible individuals receive Winter Fuel Payments when needed the most.
In July, Chancellor of the Exchequer Rachel Reeves revealed plans to means test the winter fuel allowance, limiting it to those on Pension Credit and selected means-tested benefits to reduce the number of payment recipients in England and Wales.
SSAC expressed disappointment in the absence of an impact assessment from the government to evaluate the effects of the proposed changes.
Prime Minister Sir Keir Starmer indicated that a comprehensive assessment was not legally required, citing the expected mitigation through increased Pension Credit uptake.
SSAC stressed the necessity for a detailed assessment given the significant impact on pensioners and urged for an urgent evaluation of the potential poverty impact.
Pension consultants warned that restricting payments could affect over a million pensioners living below the poverty line, either ineligible or not claiming Pension Credit.
Despite backlash from various quarters, the government defended its decision to means test the Winter Fuel Payments to alleviate financial strains.
Opponents warned of detrimental effects on vulnerable pensioners, but the government assured continued support for the most disadvantaged individuals and initiated campaigns to encourage Pension Credit applications.
Unpopular Policy
Both sides of the political spectrum have criticized the policy, with Labour delegates supporting motions to reverse the decision at a recent conference.
Shadow work and pensions secretary Mel Stride condemned the move, highlighting the potential impact on poverty-stricken pensioners and urging Labour to reconsider the policy before the upcoming Budget.
A Downing Street spokeswoman acknowledged that the decision was not ideal but emphasized the commitment to ensuring eligible individuals receive the necessary support.
PA Media contributed to this report.
